Many of the Bank’s projects involve large-scale investments in a single location. However, the Water Supply and Sanitation project in Portugal is an example of how EIB financing can reach the wider community. The operation supports the investment programme of Aguas de Portugal (AdP), which serves about 80% of the total population.

Over eight million inhabitants are expected to benefit from improved water services and over six million from enhanced wastewater services. To achieve this, treatment plants will be constructed, upgraded or expanded and nearly 2 500 km of sewers will be laid or upgraded, along with 1 400 km of mains water piping. The scale and nature of the physical works means that the programme will take some time to implement, but all of the sub-projects should be complete by the end of 2021.

The project should ensure compliance with key European legislation in the water sector. In 2015, the Portuguese government launched a comprehensive reform programme to improve the quality and sustainability of water and wastewater services: harmonising tariffs across the country, promoting equality and regional solidarity, and strengthening financial sustainability. The reform also involves the aggregation of operators at both municipal and supra-municipal levels to reduce market fragmentation and promote efficiency and effectiveness.

The value added of the EIB’s intervention under the EFSI guarantee is that it will allow the AdP Group to carry out a major investment programme on conditions which would otherwise not have been available to it, and accelerate the implementation of targets set by new regulations. In addition to providing the clean water which is regarded as a human right, the project will also improve the system’s energy efficiency, and make it more resilient to climate change. There will be a particular benefit in remote areas by allowing a wider range of economic activities to be undertaken, including tourism.